BCUC’s Preliminary Report About Site C Reaches Few Conclusions

On September 20, 2017, the British Columbia Utilities Commission (BCUC) issued its Preliminary Report about BC Hydro’s “Site C” hydroelectric project. This is the final step in the “fact gathering” phase of the Government-ordered “Site C Inquiry Process.” That process requires the BCUC to determine the implications of completing, suspending or terminating the Site C project. In the Preliminary Report, the BCUC indicates that the project is currently on schedule, but that it requires further information to determine whether the project is on budget and about the costs of suspending or cancelling and replacing the project. BC Hydro is required to provide this information by October 5 to ensure that the BCUC can issue its Final Report by November 1.

Background

As explained in the Preliminary Report, Site C is a dam and hydroelectric generating station being built by BC Hydro in the province’s northeastern Peace River Regional District. The project includes a new reservoir that will run 83 km along the Peace River and will submerge approximately 5,000 hectares of land. Site C is planned to provide a peak capacity of about 1,145 megawatts (MW) which, according to BC Hydro, will power the equivalent of 450,000 homes per year. The budget for the project is around $8.3 billion.

The Site C project received BC and Federal environmental approvals by November 2014 and construction began in the summer of 2015. The project was an issue in the recent provincial election, with the NDP and Green parties indicating that they would review and/or cancel the project if elected. After NDP leader John Horgan became Premier, an Order in Council (OIC) was issued requesting that the BCUC convene an inquiry. The OIC asked the BCUC to advise Cabinet on the implications of:

(i) completing the Site C project by 2024, as currently planned;

(ii) suspending the Site C project, while maintaining the option to resume construction until 2024; and

(iii) terminating construction and remediating the site.

The OIC also directed that the BCUC address specific questions, including whether the project is on time and on budget, what the costs are to suspend or cancel the project (and how could those costs be recovered) and what other options exist to meet the supply and clean energy benefits expected from the project.

The BCUC Inquiry Process

The OIC set an aggressive timetable for the BCUC inquiry, as can be seen in the diagram below (taken from the BCUC’s Site C Inquiry Webpage):

As can be seen, the Site C inquiry process is split into two phases: initial fact gathering which concluded with the publication of the Preliminary Report, and additional fact gathering, consultation and submissions concluding with the publication of a Final Report.

During the initial fact gathering phase, the BCUC sought submissions (including from BC Hydro), reviewed and analyzed those submissions, and engaged an expert to assist in estimating costs and identifying and evaluating alternatives to Site C.

The BCUC Panel assigned to the inquiry considered all submissions received, and then issued the Preliminary Report. As summarized in the BCUC Press Release dated September 21, the preliminary findings of the BCUC Panel included the following:

the Site C project is on time for an in-service date of November 2024;

the cost to terminate the project and remediate the site would be $1.1 billion (in addition to the $1.8 billion spent to date), but there would be further costs required to replace the needed energy that would have been produced by Site C; and

there is not currently clear information about the total costs for the project in the event it is suspended and restarted at a later date.

Importantly, the BCUC Panel identified further information that it needs in order to make findings on a number of required items, including whether the project is currently on budget, the cost to BC Hydro ratepayers of continuing, suspending or terminating Site C, and what the reasonable alternatives to the project are. BC Hydro has been directed to file additional information addressing 70 specific follow-up questions to be completed by October 4.

Next Steps

In addition to receiving and reviewing the additional requested information from BC Hydro, the BCUC has invited submissions from BC Hydro and the public to be provided by October 11, and also plans to conduct an “extensive consultation process” on its preliminary findings. As explained on the Site C Inquiry Webpage, the BCUC will hold “Community Input Sessions … in all major population centres in BC and in areas where the Panel considers the Site C project has a higher impact.” Input will also be sought from First Nations.

As required by the OIC, the BCUC will issue its Final Report on November 1.

Short Bio

David is dedicated to understanding his clients’ businesses and to working collaboratively to create and implement solutions to advance their ob...

David Stevens is a partner and a member of A&B’s Energy Group. David has practised in the area of energy regulation for almost fifteen years. He advises gas and electric utilities, and other participants in Ontario’s electricity market, on a wide range of regulatory and commercial issues, and regularly appears before the Ontario Energy Board. Among other things, David has expertise in regulatory issues related to ratemaking, policy interpretation, customer protection, cost allocation and stakeholder relations. David has been recognized in The Best Lawyers in Canada in the field of Energy Regulatory Law.

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